Forum Host Bill Raisch: Larry as CEO of the Internet Security Alliance, you have a definitive multi-sector perspective both through your members as well as through your wider engagement. Your organization has also done a substantial amount of research in the digital arena and produced some significant thought leadership as well as policy products to the US Government and others.

With that lens as a starting point, What do you see as one of the most important disruptors facing global corporations, markets and/or wider society?

Larry Clinton: The digital revolution is the most disruptive force affecting global markets today. Most organizations have by now begun to factor into their business plans the positive elements of digitization such as web based marketing, inventory efficiencies, off-site servicing and employee management systems. Moreover, the globalization of markets has been tremendously accelerated by digitalization bringing both massive new opportunities and new competitors, However enterprises have been slow to appreciate the full extent of their vulnerability to cyber-attacks. Many organizations are still limiting their notion of the downside of digital attacks to comparatively small items such as IT and website downtime. In reality their most precious business secrets, intellectual property and long term competitiveness are being challenged. Sometimes their security is being undermined by competitive needs to adopt strategies and technologies, such as the use of international supply chains and cloud computing systems that inherently undermine their security. Many are also fighting advanced cyber threats with outdated theories and systems such as perimeter defense, oriented anti-virus and passwords that are of marginal effectiveness against modern attacks.

Bill Raisch:Ok, then what do you see as the potential impacts of “digitalization” as a disruptor?

Larry Clinton:Digitalization has fundamentally changed the way we need to understand almost everything, concepts of self, concepts of privacy, concepts of national defense and business economics. Its disruptive effects are barely being considered let alone fully understood.

Bill Raisch: Then what strategies would you suggest to address the digitalization disruptor – to either mitigate negative impacts and/or to capitalize on potential opportunities?

Larry Clinton: There are many many things that ought to be done to manage the effect digitization’s effects. The most basic of these is to broaden the notion of what we are discussing. Too often both corporate and national policy makers are thinking of cyber issues as simply “IT” issues to be managed by technologies and associated standards and practices. In reality this is an enterprise-wide risk management issue that must be understood and addressed in a multi-faceted and comprehensive approach integrating technology with business economics (both the good and the bad) as well as enlightened national policy.

Forum Host Bill Raisch: Edward, Cisco is essentially a wide web of interrelationships and operations across an extensive global footprint. You had responsibility for risk in the supply chain, which if I recall correctly runs into the thousands of suppliers, as well as responsibility for security, safety and business continuity for Cisco. That’s a lot of moving pieces and functions. You’re now working on an enterprise resilience platform at Intrapoint.

What do you see the most important disruptors facing global corporations, markets and/or wider society?

Edward Erickson:

Rapid and / or incorrect information flow i.e. stock market recently, highlights the need to be prepared as you are tried in the public with no time to formulate

Forum Host Bill Raisch:Ed, you’ve had responsibility for security in a wide range of environments from the US military to major Fortune 500 firms including Thompson Reuters, CIT Group and Pfizer.

What do you see as one of the most important disruptors facing global corporations, markets and/or wider society?

Ed Levy:Natural Disasters – will continue to happen on a global scale; very little to mitigate or divert the occurrence; no direct targeting; wide area impact…businesses, homes, people, all sectors of the infrastructure, etc.

Bill Raisch:What are the potential impacts of this disruptor?

Ed Levy: Long term and financial impacts from response, consequence management, business impact, reputational, and human toll.

Bill Raisch:What strategies would you suggest to address this disruptor – to either mitigate negative impacts and/or to capitalize on potential opportunities?

Ed Levy:

Realistic risk management program to address potential consequences.

Sustainable and dedicated emergency response and crisis management programs within the government and private sectors.

Vice President for Research & Emerging Issues, US Chamber of Commerce Foundation; Principal, Catalyst Partners LLC

Forum Host Bill Raisch: Rich,in terms of “disruptors,” you have broad and diverse experience ranging from your current work on emerging issues at the US Chamber of Commerce to your prior responsibilities at US Homeland Security and NASA as well as work in the high tech field and a variety of other arenas.

From this broad perspective, what do you see as one of the most important disruptors facing global corporations, markets and/or wider society?

Rich Cooper: On top of the traditional disruptors (e.g. Mother Nature; acts of violence/terror, infrastructure failures, etc.) we now have the advent of the digital disruptor. All it takes is a simple post to a social media outlet (be it from a hacker; or disaffected customer or rival) that can quickly go viral that can send a market, a reputation or a community into a tailspin.

The very dynamic tools that keep people informed and engaged are extremely susceptible to hacking, hijack and hyperbole. All you have to do is take a look at the recent hacking of the Associated Press’ Twitter account about “an attack upon President Obama” that sent the trading markets into a brief tailspin. Even some of the real time reporting that was factual and other reports that were later determined to be fictional regarding the recent bombings at the Boston Marathon created anxiety and other challenges for people, law enforcement and others in the greater Boston area.

Companies, communities and organizations of all sizes and shapes are going to have to engage in a 24/7 vigilance of their on-line reputations like never before or risk the long and short term consequences to their reputations if they ignore these tools and how they are used and misused.

Bill Raisch:What are the potential impacts of this digital disruptor?

Rich Cooper:Real dollars and cents are always at play in any disruption but so are the potential negative impacts to reputation and brand recognition. The phrase “you only have one chance to make a first impression,” comes to mind but it is inherently unfair when digital disruptors come into play and they can turn a solid reputation into absolute ruin by a few clicks and keystrokes.

Because of the actions of a hacker, the Associated Press is now in a position where they not only have to respond to false information that was put out under their name, they have to address the vulnerability of their networks by outside forces. They must try to not make themselves part of a news story (which is not where a news organization wants to be – they want to report stories – not be their subject line). Further they must try to restore the confidence in their brand and reputation that their customers and consumers have in the information that the AP puts out on a regular basis.

This is just not an AP issue. Other government departments and agencies; educational institutions, private sector members and individuals have found themselves victims of similar types of digital disruptors. We hear about the big names and big incidents when things like the AP story, the Boston bombings and other events occur but this is a 24/7 circumstance that is growing exponentially as more and more people and organizations become connected and interact digitally to the world around them.

Bill Raisch:So what strategies would you suggest to address this digital disruptor – to either mitigate negative impacts and/or to capitalize on potential opportunities?

Rich Cooper: The same strategies that you deploy for any other type of disruptor should be applied in these circumstances and it all starts with vigilance and awareness. Accepting and understanding that these types of events can happen to you and in all likelihood will happen to you in some shape or form is part of the game. Thinking that your name and brand are unsinkable and untouchable are the famous last words of the captain of the Titanic and we all know how that ends. You end up becoming a test case for what not to do in these circumstances and a perpetual example of what not to do forevermore.

It is possible to capitalize on these opportunities though if you demonstrate the veracity of your vigilance; show your attention to detail and address the circumstances head on and apply the lessons learned immediately. I think the example of the recent hacking of the Associated Press account demonstrates how quickly they addressed the situation to correct the mis-information that was put forward; share what happened and discuss corrective actions and therefore reinforce the integrity of their name and daily works.

Some may argue that this all comes down to active messaging and that would be entirely true because if you are not vigilant and active to recognize the situation and address it accordingly, you risk greater harm long-term by showing your ignorance and non-acceptance of the situation. In those situations, I don’t care what form your disruptor takes, you are hamstringing your response from being effective, strategic and addressing the circumstance head on.

Forum Host Bill Raisch: Jim, you’ve served both in the U.S. Department of Energy and the U.S. Department of Homeland Security with a special focus on the public-private interface.

What do you see as one of the most important disruptors facing global corporations, markets and/or wider society?

Jim Caverly: The changing dynamics of energy supply and pricing due to the boom in natural gas supply resulting from fracking. In its early stages the disruptions are principally US domestic, as fracking expands internationally it has the potential to disrupt both individual foreign markets and the entire international marketplace.

Bill Raisch:What are the potential impacts of this energy disruptor?

Jim Caverly:

The US becomes a net exporter of energy – something no energy analyst would have credibly predicted over much of the past 50+ years – US LNG import terminals are converted to export terminals.

Natural gas will be the energy hallmark of the 21st century just as oil was for the 20th – post Fukishima nuclear revitalization is delayed.

As the Green House Gas preferenced fuel, natural gas will place significant stabilizing to downward pressure on both coal and oil prices.

Geo-strategic dependencies change as new producible (frackable) reserves of natural gas come on line, especially in Europe, reducing the demand/value of natural gas from Russia, Iran, and other producers.

Long term decreases and stability in US natural gas prices revitalize domestic energy intensive industries such as chemical manufacturing as investment and production return to the US.

Significant increases in use of natural gas use will impact the production of Green House Gases as well as the growth in demand for and use of coal and oil – further complicating the climate change debate/policies.

Bill Raisch:What strategies would you suggest to address this energy supply disruptor – to either mitigate negative impacts and/or to capitalize on potential opportunities?

Jim Caverly: Many to most of the impacts on or in the US domestic market are already identified and factor into strategic planning – one key will be to anticipate and recognize these impacts in foreign venues as fracking penetrates overseas.

One that I’m still toying with is potential impacts and rifts from the difference between the US approach to natural resources and China’s approach to them. US thinking and policy from the mid 70’s, principally driven by oil considerations, has been to increase the resource, i.e. drill and produce more, and to assure free and equal access wherever it is in the world. China’s philosophy has been to acquire and control the resource and the means of production, i.e. buy up/into the resource, invest in its production to supply their domestic demand. What happens when/if China begins to restrict access to these resources to meet its domestic needs versus letting the resource go to the highest bidder on the international market?

Forum Host Bill Raisch:Ted, you are a veteran journalist, essayist and former member and trader of the Chicago Mercantile Exchange. Further,you’ve authored two books as of late. All of which give you a distinct perspective on current and emerging disruptors.

In Shock of Gray, The Aging of the World’s Population and How it Pits Young Against Old, Child Against Parent, Worker Against Boss, Company Against Rival, and Nation Against Nation, you look at how the aging of the world is propelling globalization, redefining nearly every important relationship we have and changing life for everyone young and old.

With that broad perspective, what do you see as the most important disruptors and their likely impacts facing global corporations, markets and/or wider society?

Ted Fishman: A few things come to mind.

A) The reassertion of the state as a powerful economic player in realms that were ceded to the private sector. As emerging markets rise toward middle incomes for their populations, states such as China, Venezuela, Russia and Brazil show how tempting it is to re-engage in the marketplace and take, for connected state players, larger stakes in national economies. The moves also push competition and innovation out, raise new possibilities for corruption and populist economic policies that use resource riches to, in effect, buy off votes. Regulation becomes almost impossible because of the lack of separation between the regulators and the regulated.

B) Shifting labor forces driven by a difficult combination of demographic transition and economic straits. In countries where historically low fertility rates are shrinking the local force, the workplace is changing forever. Manufacturing is increasingly handled in highly automated plants or outsourced to places with abundant, and low-cost labor. At the same time, service sectors grow, and immigrants are frequently called into to fill low-wage service sector jobs. This creates a whole new population that is employed outside their home countries but who travel through their own work lives without social safety nets.

C) On the positive side, changing demographics are also one of the chief drivers of global prosperity creating new middle class consumers. As families shrink, children benefit as they get larger portions of their families’ means, usually spent to keep them healthy and to get them schooling. This is raising their prospects, their skills, their wages and the lifespans.

Bill Raisch:What strategies would you suggest to address these disruptors – to either mitigate negative impacts and/or to capitalize on potential opportunities?

Ted Fishman:

A) For dealing with the reemergence of state sectors, it becomes much more important to have international norms of regulation. With international norms, enforced across borders, countries do not have to depend on their own, often mobbed-up, regulatory systems to protect people as businesses, consumers and citizens.

B) The best response to changing demographics is to help workers be as productive and contributive over their lives as possible. This requires new modes of education that prepares workers for highly automated work conditions; it gives them skills to strike out on their own when employers are less than willing to hire them late in their work lives. It makes mid- and late-career workers more valuable later in life than they were earlier in life, because of their accumulated skills.

C) Demographic shifts will bring prosperity to parts of the globe that have long been under-appreciated economically. Look to new markets that will develop very rapidly as their people enjoy both the fruits of lower fertility and the demand for their youthful labor forces.

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Welcome to The Global Disruptors Forum

World experts and key international actors from business, government, civil society and academia converge here to discuss current and near-future disruptors, their ramifications and impacts as well as actionable strategies to address both the threats and opportunities that these disruptive forces present.